SHANGHAI, May 16 (SMM) – The most active SHFE 1208 copper contract opened RMB 1,080/mt down at RMB 55,600/mt Tuesday, since LME copper prices slumped overnight. As LME copper prices hovered around USD 7,800/mt during the whole trading day, and since Chinese stock markets slid by more than 1%, SHFE 1208 copper contract came under pressure and swung weakly around the daily moving average, with a fluctuating band of RMB 400/mt and reaching a low at RMB 55,280/mt. At the tail of trading, SHFE 1208 copper contract pared the daily drops due to large-scale position closings, climbed to a high at RMB 56,090/mt, and finally ended at RMB 55,950/mt, down RMB 730/mt or a loss of 1.29%. Positions and trading volumes for the most active contract decreased by 14,440 lots and 134,000 lots, respectively, while those for SHFE 1209 copper contract added by 16,660 lots and 2,514 lots, respectively. This indicated the shift of the most active copper contract. Owing to weakening buying support, SHFE copper prices made corrections following the previous two days' considerable declines.
SHFE copper prices sank by nearly 2%, and there was almost no price gap between SHFE 1205 and1206 copper contract, inasmuch as Tuesday was the last trading day for SHFE 1205 copper contract. Hedged copper cargo-holders sold aggressively and led to an increase in spot copper supply. However, spot copper premium quotes remained firm between positive RMB 60-120/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 56,100-56,220/mt, and RMB 56,150-56,300/mt for high-quality copper. Downstream producers opted to enter the market following significant drops in copper prices, allowing market transactions to improve. In the afternoon session, SHFE copper prices stabilized and began to rally at the tail of trading, but actual traded prices in spot markets were virtually flat with the morning business levels.